In May federal legislators passed Bill C-21 in Parliament, which received Royal Assent just before the federal election. In essence the bill was enacted in response to the soft stance the courts have taken over the years with respect to sentencing regarding fraud and white-collar crime.
While I consider the new provisions to be a significant step in the right direction, I’m concerned our legislators might have missed the mark.
The new act, “Standing Up For Victims of White Collar Crime,” makes three notable changes to Section 380 of the Criminal Code of Canada.
Firstly, it calls for a minimum mandatory sentence of two years imprisonment for frauds where the total amount defrauded exceeds $1 million.
Secondly, judges can now take into consideration several circumstances with respect to sentencing. These include, but are not limited to:
- the complexity and duration of the fraud;
- the personal impact on the victims, taking into account their age, health and financial stability;
- whether or not records were destroyed by the fraudster.
Thirdly, the act allows a judge to consider imposing a restitution order, with a view to financially reinstating the victims.
These are positive changes. However, it’s unclear as to whether the mandatory increase in sentencing will have the desired deterrent effect.
I suspect it won’t. A two-year sentence often results in far less actual time behind bars under our lenient system in which prisoners can be released after serving only a third of their sentence.
I doubt most fraudsters will even think about the possible punishment, when it’s that low a number of years and when there’s a chance to defraud a million dollars or more.
Another question to ponder is whether two years in jail is enough for victims to feel fully redeemed? Again, I suspect not. The victims of a fraud in excess of $1 million are often left penniless, losing the retirement nest eggs they had worked so diligently to obtain. The psychological damage can be devastating. Many victims suffer health problems from the stress and pain.
It’s good that victims will be given the opportunity to tell the courts the impact the crime has had on them. I can only hope judges take what they say into account when imposing the actual length of the sentences. A two-year term, after all, is just a minimum.
As for restitution, I believe the aforementioned changes will result in an increased frequency of filing orders. The thought process is well intended, but reality would suggest the likelihood of recovering assets and cash as a result of the issuance of these orders is negligible.
Most fraudsters have either spent the proceeds of their work on ill-advised luxuries, or have gone to great lengths to conceal the illicit funds. Either way, restitution orders have historically been of limited value, largely because the courts cannot find the money.
In my opinion, the victims would be better advised to avail themselves of the civil remedies, which have been significantly more successful in the recovery of assets, traced primarily through the use of forensic investigative services.
In no way do I want to diminish the efforts of the federal government in passing Bill C-21. In fact, I applaud it for its efforts. Every step in the right direction in terms of fixing our justice system is admirable, particularly when it comes to white-collar crime, still viewed by many in the justice system as “not worth the time.” I doubt many victims of fraud feel that way.
I believe the new provisions haven’t gone far enough, particularly when it comes to inflicting as much pain as possible on the fraudsters – by sending them away for longer periods and by doing everything possible to seize whatever assets they might still have.
